Eniro is focusing on new hires within its Marketing Partner division while simultaneously cutting costs, closing offices, and streamlining operations in the Dynava division. Balancing growth investment in one area with cost-cutting measures in another could create organizational unease and challenges in aligning the team toward common goals.

During the quarter, Eniro successfully generated an operational cash flow of SEK 12 million, bringing the year-to-date operational cash flow to SEK 32 million. Coupled with a net cash position of SEK 128 million (adjusted for leasing and pension liabilities), this indicates that Eniro is well-equipped to handle market weaknesses.

We are adjusting our valuation range downward to SEK0.90 to SEK 1.46. Redeye’s Base case is adjusted to SEK1.23 (1.34) due to weaker markets. Eniro Group trades at a EV/Sales of 0.1x a 92% discount to peers and a deep discount of 94% on 2024e EV/EBITDA . Applying an EV/EBITA multiple of 6.5x (still a 44% discount to peers), we derive at a price per share of SEK1.22, in line with our DCF valuation.